The financial health of any healthcare institution relies heavily on the efficiency of its revenue cycle management (RCM). This complex process involves everything from patient registration to final payment. One metric that tracks performance and identifies bottlenecks is the status known as Discharge Not Final Billed, or DNFB. This metric indicates how quickly a facility can convert medical services into actual cash flow. Without careful management, a high DNFB total creates significant financial strain for healthcare leadership.
Defining Discharge Not Final Billed (DNFB)
Discharge Not Final Billed is a formal status assigned to a patient’s account after they have left the healthcare facility, but the final claim has not yet been submitted to the insurance payer. This status marks a specific holding period within the revenue cycle management (RCM) process. The account is stalled because one or more elements required for a compliant claim are incomplete.
This holding period, which typically lasts three to five days, is used to gather and finalize all necessary clinical and administrative data. If the account cannot be completed and submitted to the payer quickly, it is flagged on the DNFB report. This report is a running tally of unbilled revenue, representing services already rendered. The Healthcare Financial Management Association (HFMA) considers the number of days an account remains in this state a standard measure of revenue cycle performance.
The claim cannot be sent until every piece of the patient’s encounter—from diagnoses to procedures—is accurately documented and coded. The DNFB status ensures the claim is held back until this final quality assurance check is complete. This hold prevents the submission of “dirty” claims, which are likely to be denied or rejected by the payer. Once all required information is gathered, the account transitions out of DNFB status and the claim is electronically transmitted for reimbursement.
Common Causes of Claims Pending DNFB Status
The primary reasons a claim gets stuck in DNFB status are rooted in operational failures or a lack of timely communication between clinical and administrative staff. A frequent trigger is incomplete clinical documentation, such as a physician’s missing discharge summary, an operative report, or final pathology results. Without this complete narrative, the financial team cannot accurately translate the care provided into billable services.
A backlog or error in the medical coding department is another significant contributor. Coders must assign standardized classification codes, such as ICD-10 (diagnosis) and CPT (procedure) codes, based on the physician’s documentation. If documentation is vague, the coder must send a query back to the clinician for clarification, delaying final coding and billing. A shortage of qualified coders or an increase in complex cases can also create a bottleneck, causing accounts to accumulate on the DNFB list.
Administrative issues also contribute to the DNFB pile, often related to insurance or patient data errors. Claims may be held due to unresolved insurance authorization problems or incorrect patient demographic or payer information collected during registration. Some organizations also hold claims pending internal or external pre-bill audits to ensure compliance and accuracy, a time-consuming process that adds to the DNFB days.
Operational and Financial Impact on Healthcare Facilities
A persistent high volume of accounts in DNFB status has severe repercussions. Financially, the most immediate effect is a strain on the hospital’s working capital due to delayed cash flow. Every day an account sits unbilled, the money owed to the hospital remains unavailable for payroll, vendor payments, or facility upgrades.
This delay directly increases a metric known as Days in Accounts Receivable (A/R), which measures the average number of days it takes a hospital to get paid after a service is rendered. Industry benchmarks often suggest that top-performing hospitals maintain a DNFB rate equivalent to five to seven days of revenue or less. When this number rises, it signals a deeper systemic problem that ties up millions of dollars in unbilled services.
Operationally, a high DNFB rate creates administrative burden and inefficiency. Staff must spend time chasing missing documentation, following up on coding queries, and manually reviewing aging accounts, diverting attention from processing new claims. A prolonged delay also increases the risk of missing the payer’s timely filing limit, which typically ranges from 90 to 180 days from the date of service. Missing this deadline allows the payer to deny the claim outright, resulting in a permanent loss of revenue.
Strategies for Reducing DNFB
Healthcare organizations employ several strategies to prevent accounts from stagnating in the DNFB queue. A primary focus is implementing concurrent documentation review, where specialists review the patient’s chart while they are still admitted, rather than waiting until after discharge. This proactive approach allows for immediate identification and resolution of missing notes or documentation inconsistencies while the physician is available.
Leveraging technology is another effective measure, utilizing advanced revenue cycle management (RCM) software and electronic health record (EHR) alerts. These systems can be configured to automatically flag accounts with missing data, route them instantly to the correct department, and provide real-time dashboards to track progress. Automated coding assistance also helps expedite the process by suggesting appropriate codes based on clinical text, increasing the speed and accuracy of claim preparation.
Reducing DNFB requires robust cross-departmental coordination and accountability. Hospitals establish clear Service Level Agreements (SLAs) for different departments, such as requiring coders to finalize a claim within 48 hours of discharge and physicians to answer queries within 24 hours. By fostering a collaborative culture between clinicians, health information management (HIM), and the business office, organizations can proactively remove the barriers that prevent a clean claim from being submitted on time.